There are certain pieces of advice that are worth hearing over and over again: Always wear sunscreen. Everything feels better after a good night’s sleep. You can always change your hair.
This is especially true when it comes to personal finance. No matter how many times I was told throughout my twenties that I would regret not starting to save for retirement, I blithely carried along as though I had all the time in the world; as though the ankle boots were more valuable than an investment account; as though I hadn’t also regretted quitting piano lessons when I was 15, just like ALL THE ADULTS TOLD ME I WOULD.
Those restless, confusing years between school and adulthood — when we’re often living on our own for the first time, negotiating our first full-time jobs, struggling to understand healthcare and student loans, and trying to figure out how to turn a head of lettuce into something resembling dinner — are also, conversely, when we have the ability to make the most impact on our financial futures. And that’s why — even though you’ve heard it before! — I keep talking and writing about the money mistakes I made in my twenties, and asking other, smarter people to tell me the same.
Elyssa Gray, 49, has worked in financial services for most of her career. She’s currently the VP of Brand at Betterment, where she is responsible for driving brand strategy and overseeing creative direction. Prior to Betterment, Elyssa worked at Citi and Visa. While she and I have taken very different career paths, we’ve both made plenty of financial mistakes along the way. Here’s what she wish she knew about money in her twenties, in her words.
At the risk of pointing out the obvious, don’t spend more than you make.
After graduating college, I was making a whopping $19,000 [a year] living in NYC. I learned how to make a box of pasta last an entire week for dinner. My weakness, however, was shopping. I have always liked fashion — I worked in retail all through high school and college so I could buy the things I wanted. My job at the time also had a fairly strict dress code — no jeans, no T-shirts — so I did need to have a separate wardrobe for work, but I definitely went overboard.
So I shopped, I went out, I was living paycheck to paycheck. I definitely spent more than I was taking in, and debt racks up. I wish I could tell my younger self, “You don’t need it.” My credit card took a serious beating. You cannot get out of debt just by paying the minimum balance. I just didn’t truly understand the implications of debt in the way I do now. It actually took quite a few years to pay back that debt. Once I started making [more] money, I was finally able to start paying it down, and I was just smarter, and probably had more self-control.
If you have gotten into debt, the only thing you can do is stay committed to paying it down. It may take a few years, but it can be done. Different strategies work for different people. Sometimes seeing where all of your money is going, like through a budgeting app or simple spreadsheet, is enough of a wake up call to curb your spending. Find things to do socially that don’t cost an arm and a leg. Also, most of your friends are probably feeling the same stress — I’m sure they would welcome a cheaper night out!
Never be afraid to ask for a raise.
This was a difficult lesson for me to learn. When I was younger, I was so afraid to rock the boat at work and, honestly, I didn’t even think it was possible to ask for more than the three percent raise that I was given, despite being a top performer year in and year out. Not until I was in my late twenties did I learn how to advocate for myself, and while I was not met with a great response from my manager at first, I just continued to explain that I needed to be paid based on my performance. Eventually, I got the raise I deserved for the hard work I was putting in.
As a manager, my advice for anyone negotiating a raise is to be fact-based, and not turn it into an emotionally-driven conversation (even if you find that you are emotional about it). It’s best to have the data to help make your case. This can be a combination of past performance reviews, your goals and how you have exceeded them, as well as salary comps. Much of this information is available from employers or online. Know your worth. Also, I am a firm believer that the answer is always no unless you ask. And if the answer is no, you’re allowed to ask for clarity. Make sure you understand what is driving that answer from your manager or employer.
Without a doubt, the best thing I did for my finances when I was young was invest. I actually started investing very early on: My first leap came from money I received from my Bat Mitzvah. I was fortunate that my father was and still is a financial advisor, so I think I always understood the value not only of saving money, but of making sure to put it somewhere where it had the potential for growth. As difficult as it might be to imagine investing when you are struggling with debt or have a salary that doesn’t stretch far, it is the single best thing you can do to plan for your future.
When I started working, I made sure to prioritize maxing out my 401(k), and I even bought stock in the company I was working for, which proved to be a good investment. There’s really no excuse not to invest these days (ed note: here’s a guide!), especially because there are just so many simple ways to get started that take a lot of the guesswork out of it, and places that have no minimum required amount to open an account.
Collage by Emily Zirimis.